242. Should you pay off your mortgage before you invest

Yeah, so a really common question that we get asked, which is, should you be debt-free before you invest any money?

Ooh.

Answer's no. [laughs]

Podcast over.

Oh, come on.

[laughs]

What do you mean? There's certainly a case for it, and especially when you're looking at the rise of, you know, some of the discussions that people are having online and, you know, maybe shout-out to Dave Ramsey and some of the, the content around that, in that, you know, if you've got debt, then everything should be going towards paying that off.

And once you've paid that off, then you can start your wealth accumulation.

There's a place for it.

I'm gonna come back full circle by the end of this episode.

Yeah.

And we're gonna-

You're gonna change your mind

... we're gonna conclude on the answer is no.

But like anything that, or everything that we tend to do, uh, when we're talking to people about financial is d- well, this is what I was gonna say.

Depending on your situation, like everything that we do with financial advice, it really depends.

So I think you're absolutely right in, in terms of the stuff that you see, like with someone like Dave Ramsey, there's different stages to it, and we talk about, you know, consumer debt and car loans and credit card debt and what have you.

And in that instance, I think it makes sense.

I mean, we'll unpack all of this stuff.

But where my mind went immediately is I need to get rid of, assuming that I had a mortgage, I need to get rid of my mortgage, and then I'll start investing.

And I guess one of the challenges that we face is that a mortgage term in Australia is 30 years.

If you're waiting 30 years to start investing, you're losing decades and decades and decades of the best time.

So I think the best strategy, like what you said, really depends on income, age, risk tolerance, goals, the types of debt that they've got.

We'll unpack a little bit of this.

We speak about the, the sleep test and what does that then look like, 'cause, you know, you might have a credit card debt of, of three grand, and I may have a credit card debt of the same, but for me, it keeps me up at night, and for you, you're okay with it.